Seeding the economic clouds

EAGLE — An airport remains a hole in the sky through which money falls, although sometimes you have to seed those clouds.

Air Canada landed a $120,000 flight guarantee — $95,000 from Eagle County and $25,000 from Vail — for its flights from Toronto this ski season.

Data from the Eagle County Regional Airport indicates that’s a dandy return on investment. Air Canada flies 800 passengers into the airport each year, and they each spend an average of $2,000.

That’s a $1.6 million return on their $120,000 investment.

Air farmers

Support Local Journalism

Donate

Air Canada is taking it one season at a time, and this guarantee is for this ski season. This winter is Air Canada’s second season flying into Eagle County.

If the flights are successful enough, they won’t need the money. If it’s not, they could collect up to that amount. That’s the template for all new routes, said Greg Phillips, director of the Eagle County Regional Airport.

New flights are announced, but sometimes people don’t know it’s there, especially that first year, Phillips said.

“Last year was a good start, but it required a little backing,” Phillips said.

Guarantees for year round service have reached the $1 million range in some areas. In mountain communities you’ll find flight guarantees in the $400,000 to $500,000 range, Phillips said.

“As revenue guarantees go it’s at the smaller end of the spectrum,” Phillips said. “The idea is to support the flight while it builds steam.”

Most routes end up being self-sustaining, Phillips said, but usually they need a little help.

“We gotta be farmers and get involved,” Phillips.

Air Alliance

The EGE Air Alliance does most of the local cultivating. It’s a nonprofit dedicated to driving flight service into the Eagle County Regional Airport.

In 2002, a small group of business leaders and several local government entities signed an agreement with American Airlines for daily nonstop 757 service from Dallas/Ft. Worth.

After three years, the flight proved successful enough that AA dropped the guarantee requirements.

These days, EGE Air Alliance’s airline guarantees are focused on United’s summer flight from Houston and Air Canada’s Toronto flight, said the Alliance’s Michael Brown.

“Air Canada seems happy with that flight. The planes are about 70 to 75 percent full,” Brown said. “When you start getting flights 70 to 80 percent full and higher, it becomes a profitable route.”

Airport economics

The Eagle County Regional Airport pours more than $635 million annually into the local economy, according to the Colorado Department of Transportation’s latest Division of Aeronautics study. There are 14 commercial airports in Colorado, generating $36.7 billion in total economic output.

Those numbers put Colorado’s airports among the state’s top economic generators, along with the agriculture, tourism, energy, technology and communications sectors.

Eagle County airport’s economic output fell from $982 million in 2008 to $635 million in the 2013 data. The airport was hit by the same economic factors as the rest of the country.

How AN airport’s economic output is calculated

CDOT calculates an airport’s economic output by a combination of three income sources:

• Direct revenue: Salaries and money that flow through the airport.

• Indirect revenue: The economy that’s created by the airport and money generated there that flows to other parts of the community.

• Induced income: Following the money to where it’s spent in the community.

Based on those calculations, Denver International Airport has a payroll of more than $8.5 billion annually and generates an annual economic output of more than $26 billion.

Colorado Springs Municipal Airport’s payroll is $1.75 billion and has a total economic output of nearly $3.7 billion annually.

In Colorado’s resort areas, the Aspen-Pitkin County Airport has the biggest economic impact, generating employment for 8,310 people, with a total payroll of $283,004,101 and a total economic output of $841,142,866.

Hopkins Field at Nucla employs nine people and has a total economic output approaching $1 million per year; Springfield Municipal Airport in far southeastern Colorado employs eight and its total economic output exceeds $1 million annually.

Staff Writer Randy Wyrick can be reached at 970-748-2935 and rwyrick@vaildaily.com.